House Question

[kenshirley]

I am asking this for someone I know that has lost their job and is also in trouble.
They have a house that unless the job market changes they are going to lose when they file a Chapter 7. It will be no asset case.
I surrendered my RE long before I filed so I don't know what to tell them now.
They are back 2-3 payments on the house now. Filing will stop anything like foreclosure I assume from happening but for how long?
I must assume at least through the 341 meeting they would be safe from foreclosure proceeding.
How long after the 341 are they going to have before they are going to have to get out of the home?
Is there a general rule or guide line I can tell them about?

[justbroke]

Hey Ken, how's the fishing? (You know I'm still jealous!)

They are back 2-3 payments on the house now. Filing will stop anything like foreclosure I assume from happening but for how long?

This depends. Since they are 2-3 payments, they should be getting a Notice of Deficiency (NOD) soon. In that NOD will contain a cure period (which is dependent on underlying State non-bankruptcy law) and can be 30, 45 or even 60 days from the date on it. After that date, the lender can and may start the foreclosure process (although the NOD is the precursor).

As to how long... depends so much on the State. I'll use an example. In North Carolina, say that they were 90 days past due, an NOD was issued, but no suite was filed yet (for the lender to exercise a power of sale clause in the mortgage/note). So, they file, and that stops the foreclosreu process. Assuming that the debtor also puts that they will surrender the property (on the Statement of Intentions (SOI)), the lender would probably wait until after the 341 Meeting to file a Motion for Relief from Automatic Stay (RFS). The RFS is a contested matter and there has to be a hearing on it, so that's 21 days from when the lender files the RFS. (Okay, so were at at about 60+ days after filing).

Then the court will grant the Lender the ability to foreclose (because the debtor put they are surrendering on the SOI) -- unless the debtor starts to fight it. So let's just assume the RFS is good and the lender "starts" the process.

In N.C. this is first met with a suit for them to exercise the power of sale, and this is done in local State court. They will then have about 20 days to respond to this notice. If they respond, they can delay it somewhat... however, non-judicial sales are pretty hard to stop without really good cause (like messed up documentation!). So let's say that after the 20 days, the lender gets the okay to sell. They then have to sell it according to a process which could be another 30-59 days. So you now have 50-79 more days of waiting (in N.C.). That supposes that the property actually does sell or the sale is actually scheduled and completed! (In N.C. I'm still awaiting the sale of my home I surrendered in October 2008!!!)

Bottom line is that unless they were already "in" foreclosure, the normal process will run its course.

If they had already received the notice of sale, in N.C., the lender can continue RIGHT where they left off after the stay is lifted. So it depends on how far in the process it is (in N.C. at least). In some States, the stay imposed by the Bankruptcy would reset the entire process.

How long after the 341 are they going to have before they are going to have to get out of the home?

See above.

Is there a general rule or guide line I can tell them about?

See above. I would probably guess that a person has at least 60 days after the 341 Meeting even if they were already in foreclosure. With the way the courts are backed up -- unless you're on the infamous Rocket Docket -- foreclosures have slowed, but they are still going on.

[kenshirley]

OK, thanks for the information. I know Phoenix where they live has many in foreclosure already. I will pass the information on.
Fishing? As a matter of fact I went this AM.
Turns out it was a bad day to go. Schools are getting out here in AZ this week for the summer and guess what?
Yep, almost every school in town had buses at this small 15 acre lake. Many were fishing and it kind of made a mess. Those teachers had their hands full.
What the hell, I taught two boys and two girls all around 10-13 I would say how to cast their borrowed poles, showed them how to bait and then left.
Before they got there I had only 3 bites in around 45 minutes and got only one landed. The smallest fish I have ever caught in the lake, a rainbow of course, around 8" is all. I turned him loose.
The stock size is 12-14" so this one must have been a runt or the bigger fish would not let him eat before he was stocked!
Oh well, you know what they say, the worst day fishing beats a day at work.
I don't have that problem anymore either due to retirement!